The cost-benefit analysis of the NBN, released by Communications Minister Malcolm Turnbull, is a welcome addition to the debate on what sort of broadband rollout Australians want to see.
But as with all studies of this nature, its findings are premised on assumptions, in particular a critical one about what Australians will want to do with a fast broadband network in the future.
This has always been at the heart of the debate over the NBN. Do we build Labor's NBN, with optic fibre all the way to the home or business in most cases, with an eye to potential future applications, even those beyond our current imagination?
Or do we build a cheaper multi-technology network as the Coalition is now proposing and provide faster - but not as fast - connections that will do the job now and for the next 10 years?
You can't compare fibre-to-the-premises to fibre-to-the-node without looking at the big picture.
The long-awaited NBN Cost-Benefit Analysis arrived last week and was seized on by the government to justify its preference for a multi-technology mix approach to the NBN, rather than the original plan of running fibre to almost every home. If you're still not convinced that the scaled-back NBN is a bargain, Communications Minister, Malcolm Turnbull, is happy to spell it out for you on a whiteboard – in a video explaining why fibre-to-the-node (FttN) is more cost-effective than fibre-to-the-premises (FttP).
Of all the flak the government copped in the media last week over the NBN, Turnbull singled out my comments – Government low-balling us on second-rate NBN – for rebuke. Turnbull challenged my use of the word "ignored", because I said his whiteboard calculations favouring FttN ignored the hidden costs of the multi-technology mix such as upgrading and maintaining the copper and HFC cable networks. He called on me to correct my mistake and apologise for misleading readers by claiming these costs were ignored.
It's not the first time Turnbull has taken umbrage to my coverage of the multi-technology mix debate and suggest I spend more time reading the reports. As with before, the closer I look at the fine print the more concerned I am that the government's long-running "near enough is good enough" approach to the NBN is selling us short.
My accusations of low-balling were sparked by Turnbull's whiteboard explanation of the economics of rolling out fibre-to-the-node rather than fibre-to-the-premises. He didn't offer specific numbers but clearly said that the cost of rolling out fibre to every home in a FttP network is "typically three to four times" the cost of rolling out fibre to street cabinets in a FttN network.
Turnbull then drew a line of this graph to illustrate that it's not worth building a FttP network because "the marginal utility goes to zero". In other words, by opting for FttP we'd spend a lot more to offer faster download speeds which people wouldn't pay for because they don't need it. The jump from 10Mbps to 20Mbps is a lot more valuable to people than the jump from 40Mbps to 50Mbps. Eventually people reach a point where they won't pay any more for faster speeds – that's the zero marginal utility line. The expense of FttP puts it well above this line on Turnbull's graph.
Meanwhile the graph's FttN column comes in very close to the zero marginal utility line, because FttN is so much cheaper than FttP by Turnbull's calculations. While Turnbull doesn't use the phrase "multi-technology mix" in the video, the obvious take-home message is that the government's NBN plan is a better deal for Australians than Labor's FttP plan.
Turnbull refutes my low-balling accusations by pointing out that the Cost-Benefit Analysis does allow for the extra costs of the multi-technology mix plan. My criticisms weren't aimed at the Cost-Benefit Analysis, they were aimed at Turnbull's whiteboard lesson. While he makes some valid points in the video, it is misleading for Turnbull to use an FttN versus FttP comparison to justify the government's new-look NBN.
Tunrbull's graph might be valid if you were comparing a national FttN rollout against a national FttP rollout, but that's not what the multi-technology mix proposes for Australia. You can't realistically compare the cost of FttN against FttP in Australia without conceding that, under the government's plan, the cost of rolling out FttN brings with it the extra costs of repairing and maintaining the copper network as well as extending and upgrading the HFC cable network. There are also the possible costs of coming back later to extend the FttP network in places where FttN is no longer up to the job.
Read more: http://www.smh.com.au/digital-life/computers/gadgets-on-the-go/turnbulls-whiteboard-nbnlite-justification-doesnt-add-up-20140831-10aowm.html
Labor's all-fibre national broadband network could have been delivered faster and for less money than originally forecast, according to the confidential results of a pilot study completed last month.
The pilot took into account design changes formulated by network builder, NBN Co, last year as then chief executive Mike Quigley undertook a substantial review of the project and identified initiatives to reduce its cost and length.
The changes, which include adjustments flagged in the "radically redesigned" fibre-to-the-premises option in the government's NBN Strategic Review, were tested for the first time in a scheduled deployment to 2484 premises in Melton, Victoria.
Fibre connections to the premises began in February and included old and new buildings as well as some in rocky areas considered challenging for the rollout.
The evaluation, contained in an internal presentation document dated August 2014 and seen by Fairfax Media, shows a team combining telecommunications firms Cemetrix, CommsConnect and Linktech Telecom was on track to complete the Melton rollout in just 104 days, compared with an average of 344 days in other areas.
Ninety per cent of buildings were serviceable by fibre by the end of August - 61 per cent faster and 50 per cent more cheaply than in areas using previous rollout models, the document said.
read more: http://www.smh.com.au/it-pro/government-it/nbn-fibre-rollout-was-going-to-be-cheaper-sooner-pilot-results-show-20140905-10cgdg.html
The fibre to home is the cheapest solution in the near future of the NBN... But Mr Murdoch rules the roost on this saga...
Community television will be booted off air by the Federal Government in a little over 12 months.
Communications Minister Malcolm Turnbull today announced that community stations would only be licensed until the end of 2015.
After that, they would not be granted access to broadcast spectrum and Mr Turnbull suggested they use the internet instead.
Mr Turnbull unveiled the move in a speech to a conference hosted by the Australian Communications and Media Authority (ACMA) in Sydney.
The move would affect C31 in Melbourne and Geelong, 31 in Brisbane and TVS in Sydney, as well as 44 in Adelaide and WTV in Perth.
Australian Community Television Alliance secretary Richard McLelland described it as a "death knell of community television in Australia".
Mr McLelland, who is also the general manager of C31, said he was frustrated by the decision.
"He [Turnbull] seems to have a view that community television is not worth having in this country," he said.
The community television stations currently use a small amount of spectrum that has been set aside for a fourth commercial television station.
Who knows, it might be a good thing as long as the minister for elastic bands allows for the fastest broadband speed with fibre to home everywhere rather than his present favoured concoction of bits... Then all TV will go that cable way and there will less radio waves in the ether...
Yes, Internet TV is near, but there’s too much money in cable to go there The entertainment industry sees its future online, but for now most businesses are making too much money from cable and satellite providers to put their shows and movies on the Web first.
Several executives at the Goldman Sachs Communacopia Conference in New York on Wednesday said they have daily conversations internally about when they will be able to take Showtime or HBO directly online. Viacom and Sony moved closer to that future with a deal Wednesday to bring 22 of the cable network’s channels to Sony’s planned Internet-based television service.
“We ask it all the time and are always looking at it,” Time Warner chief executive Jeff Bewkes said when asked if HBO could be offered directly to consumers online — without a cable subscription. “Now the broadband opportunity is getting quite a bit bigger. The ability to deliver something robust is stronger, so the question you are asking is getting more viable and interesting.”
CBS chief executive Les Moonves said premium cable networks like Showtime and HBO would make the most sense for that move. He said Showtime was once the “Avis to HBO’s Hertz,” but the network’s image has improved with critically acclaimed shows such as “Homeland” and “Ray Donovan.”
“What is the appropriate way to market your product? Is it good to go directly to the consumer? Is it appropriate to be streaming? What is the future, how do we grow these businesses?” Moonves asked. “I don’t think there is a media guy you’ve got up here that isn’t involved every week” in those discussions.
But CBS also relies heavily on the retransmission fees they get from cable providers. CBS expects retransmission fees to reach $1 billion by 2016 and $2 billion by 2020. HBO, meanwhile, keeps adding new customers to its cable and satellite-only network. Last year, revenue grew four percent to $4.9 billion.
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